NCMA World Congress 2006

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(No Transcript)
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Vendor Performance Management
Breakout Session 203 Jon Maxim, President,
Maxelerate April 10, 2006 245 PM
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The 4 Phases

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The VPM Process

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The VPM Journey
Manage The Contract
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Manage The Contract

• Manage the Paper Trail
• Manage the money
• Manage your assets
• Manage changes

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Manage The Contract
Administer Contract

• Manage the Paper Trail
• Contract content and event tracking
• Deliverables
• Service level agreements
• Events Renewals, termination, price, etc.
• Vendor interaction documentation

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Manage The Contract
Administer Contract

• Manage the money
• End-to end payment administration
• Remedy and reimbursement entitlement

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Manage The Contract
Administer Contract

• Manage your assets
• What is an asset?
• Physical Assets
• Intellectual Property
• Yours
• Theirs
• NDAs and Proprietary Information

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Manage The Contract
Administer Contract

• Manage changes
• Inevitability
• Vendor vs. client view
• Incorporate rolling estoppels
• Change process
• Focal point
• Response format
• Timely disposition

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Optimize Vendor Performance

• Track Measure
• Compare
• Act!
• Incent

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Optimize Vendor Performance
Enforce Compliance

• Track
• Customer responsibilities
• Vendor responsibilities

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Optimize Vendor Performance
Enforce Compliance

• Measure
• Aligned with contract
• SLAs
• Methodology
• Problem prevention

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Optimize Vendor Performance
Enforce Compliance

• Compare
• Vendors within categories
• Executive communication

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Optimize Vendor Performance
Enforce Compliance

• Act!
• Feed Back Performance
• Obtain Remedies
• Vendor management automation tools

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Optimize Vendor Performance
Vendor Tiers

• Why tier?
• Criteria
• Expectations

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Optimize Vendor Performance
Tier III
Tier II
Tier I
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Optimize Vendor Performance
Incentives Management
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Optimize Vendor Performance
Incentives Management
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Optimize Vendor Performance
Incentives Management
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Optimize Vendor Performance
Incentives Management

• Rights, remedies rewards
• The limitations of remedies
• Use of incentives and rewards
• Optimum performance vs. overpaying

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Direct Long Term Relationship

• Establish Correct Relationship
• The True Strategic Supplier

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Direct Long-Term Relationship
The True Strategic Supplier

• What a strategic supplier brings to the
  relationship table
• Engages you in joint development
• Their senior execs are assigned to you
• Account teams have high knowledge level
• Accountable for product performance
• Leader in their industry
• Committed to continuous improvement
• Expectations custom built to your company
• Create competitive advantage for you
• Provides preferential pricing

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Control Unmanageable Vendor

• Love
• Leverage
• Conflict Resolution
• Termination

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Control Unmanageable Vendor
Sources Of Leverage

• The Contract
• The Marketplace
• The Relationship
• The Law
• Your Checkbook

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Control Unmanageable Vendor
Termination Project Plan

• Assign project manager
• Form transfer team
• Develop termination strategy
• Gain executive sponsor approval
• Select replacement supplier
• Develop transition plan
• Ramp up new supplier
• De-ramp current supplier
• Deplete inventories
• Clear invoices
• Inform clients
• Communicate with current suppliers
• Communicate with stakeholders and business units
• Terminate supplier transactions

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5 Keys To Success

• Executive support
• Teaming stakeholders
• Classification of suppliers
• Measurement
• Rules of engagement